Are We Ready For Consumer Robots?

It’s been a cold winter in Canada so far, something few of us like. However, it’s not all bad—trapped indoors by the bitter weather one recent Sunday afternoon, I spent several happy hours with my nine-year-old daughter building and programming her Lego Mindstorms robot. She’s been asked to join the Lego Robotics team at school, clearly showing that her generation is being taught to solve problems using robots.

R2-D2 vs. the Roomba

This experience got me thinking a little deeper about consumer robotics. Big companies such as automakers have been using robots on assembly lines for decades, with great success. However, consumer robotics remains somewhat in the realm of science fiction, dominated by iconic images of humanoid helper robots as found in Star Wars, The Jetsons or Star Trek. The Roomba vacuum, clearly not a humanoid robot, has been touted as one of the first consumer robots in the classic sense that it automates a common household task. Even more subtle consumer robots have been introduced in recent years, such as the drone, the Google Home device, and even the almost-self-driving cars on the market today.

Fido K-9000

The 50th annual Consumer Electronics Show just wrapped up in Las Vegas. A Bloomberg Technology online photo essay proclaims, Robots are Everywhere at the Year’s Biggest Tech Show. Along with a number of humanoid robots that dance, play table tennis and chess, there were robotic items such as a self-driving, intelligent carry-on suitcase, a robotic laundry-folding machine, and even a robotic pet dog. If these products sound a bit outlandish and far-fetched, I think it’s because most consumers are not yet ready to adopt consumer robots unless they come packaged in more familiar forms, such as smart TVs and appliances, computer peripherals, and yes, the increasingly autonomous car.

This immature consumer demand for robotics means that large electronics companies may experiment with product development in small areas of their companies. However, they will not transform into robotics companies; at least, not yet. At MD, we invest in several of these companies that have robotics divisions, and are therefore exposed to trends and developments in consumer robotics.

Humanoid robot technology

One such company is Softbank Group Corp., which MD owns in the MD Fossil Fuel Free Equity Fund and the MDPIM Emerging Markets Equity Pool. Softbank is a Japanese company that has had its finger in many pies since 1981: software distribution, publishing, online services, financial services, and most recently, pursuits in the telecom and clean energy businesses. The company has one humanoid robot on the market and maintains a consumer robotics division with a focus on humanoid robot technology. In 2017, Softbank purchased leading robotics lab Boston Dynamics from Alphabet (Google).

Another pioneering robotics company MD owns is Intuitive Surgical Inc. This leading edge company has developed robots to assist with an increasing number of non-invasive surgeries, measurably improving patient outcomes. Adoption of the surgical robots is picking up after years of push back from the health care system against the high cost and uncertain benefits of the devices. However, recent data suggests there are definite advantages for both patients and doctors. MD holds Intuitive Surgical Inc. in MD Growth Fund and MD Balanced Fund.

We don’t know when or how

It is interesting to note that Alphabet actually acquired 10 robotics companies in the last decade with a goal of marketing consumer robots by 2020. That mission was compromised last year when Alphabet began selling off some of those robotics labs to other companies. I suspect that Google moved too quickly for consumer demand to catch up. It is one of those waves we know is coming, but we don’t know when or how.

In the meantime, it is fascinating to watch our traditional vehicles and appliances get “smarter” every year. And if kids like my daughter are building robots and thinking about robotic applications from very early ages, we may get some extra buddies around the house much sooner than we think!

About the Author

CRAIG MADDOCK, CFP, CFA, CIM, MBA, is Vice President with the Investment Management team at MD Financial Management. He leads the team of portfolio managers and investment analysts responsible for managing the firm’s mutual funds and investment pools.